Post-Webinar Insights: Global Policy Frameworks Shaping CDR

Key Takeaways

• CDR’s primary constraint is no longer capital, but bankability—and policy is central to closing that gap. While capital is flowing, the absence of stable revenue frameworks, standards, and demand signals continues to limit large-scale project financing.
• A clear panel signal is that compliance integration—not voluntary demand—will ultimately determine market scale. Without enforceable demand mechanisms, CDR is unlikely to move beyond early-stage volumes into gigaton-scale deployment.
• Policy credibility is emerging as a critical differentiator across regions. Markets offering predictable, long-term policy frameworks are increasingly more attractive than those with higher but uncertain incentives.
• Government-led demand creation, particularly procurement, is gaining traction as an early market catalyst. Panel discussions highlighted public procurement as a foundational step toward building sustained demand and unlocking private capital.
• Standards and MRV frameworks are not just technical enablers but foundational market infrastructure. Their role in ensuring credit integrity and regulatory recognition is becoming central to unlocking financing and cross-border market integration.
• Infrastructure and permitting are emerging as the next major constraints, reinforcing that CDR scaling is fundamentally a systems challenge, not just a market or policy one.

From Voluntary Momentum to Policy-Led Market Formation 

The webinar on Global Policy Frameworks Shaping CDR underscored a structural shift underway in the market. Carbon dioxide removal is moving beyond a voluntary, corporate-led phase into one where policy architecture will determine whether the market scales or stalls.

The presentation highlighted a familiar but increasingly urgent imbalance. Contracted demand has grown rapidly, reaching over 113 million tonnes, yet actual delivery capacity remains a fraction of that. More importantly, this demand is still concentrated within a narrow pool of voluntary buyers, exposing a structural limitation: voluntary markets can catalyse early activity, but they cannot sustain long-term scale.

This sets the stage for the central question facing policymakers: how to transition CDR from a discretionary purchase to a system-level requirement. The answer, as explored throughout the webinar, lies not in a single policy instrument, but in the development of a coordinated policy stack.

The Emerging Policy Stack: From Foundations to Scale

 A key framing from the presentation was the idea of a multi-layered policy stack, where different instruments play distinct but interdependent roles in enabling market development.

At the base are standards and MRV frameworks, which define what qualifies as a credible removal. Without this layer, there is no trust in the market, no price signal, and ultimately no investability. Above this sits compliance integration, which transforms demand from voluntary to mandatory. Complementing these are fiscal support mechanisms, such as tax credits, contracts for difference, and grants, which help bridge the economic gap for early-stage projects. Finally, governance and claims frameworks ensure integrity as the market scales.

The critical point is that these layers cannot function in isolation. Fiscal incentives without demand create stranded assets. Compliance without standards risks greenwashing. Standards without demand fail to mobilize capital. The effectiveness of the system depends on how well these elements are integrated.

Regional Strategies: Fragmented Approaches, Emerging System

While the overall architecture is becoming clearer, the webinar highlighted that no single region has yet built a complete policy stack.

Europe is prioritizing standards and regulatory frameworks, laying the groundwork for long-term integration into compliance markets. The UK is moving ahead on incorporating removals into emissions trading systems, signalling a potential pathway toward durable compliance demand. North America, by contrast, is leaning heavily on fiscal incentives, deploying large-scale tax credits and funding programs to accelerate project development. Meanwhile, few other markets are experimenting with carbon pricing and bilateral mechanisms, particularly through Article 6.

Taken individually, these approaches are incomplete. Taken together, they suggest the emergence of a fragmented but potentially interoperable global system-provided alignment on standards and cross-border rules can be achieved.

Policy Is Not Just About Scale, But Credibility

The presentation highlighted that capital is flowing into the sector but remains limited by project bankability. The panel discussion added an important dimension to this by highlighting the role of policy credibility in shaping investment decisions. Comparisons between North America and Canada illustrated this clearly.

The U.S. has deployed large-scale incentives—tax credits, infrastructure funding, and multi-billion-dollar programs-yet these are accompanied by uncertainty around permitting, execution timelines, and administrative continuity. Even where funding is preserved, delays and unpredictability affect how investors assess risk. In contrast, Canada offers relatively smaller incentives but greater stability in regulatory frameworks and policy direction. Developers and investors are increasingly weighing this trade-off, with predictability becoming a key determinant of where projects are developed.

This reflects a shift in how policy is evaluated—not just as a source of financial support, but as a foundation for long-term revenue certainty and risk management.

From Policy Design to Capital Deployment: Uneven Momentum and Concentrated Risk

A clearer picture of market maturity emerges when looking at how policy is translating into actual capital deployment. Some jurisdictions are beginning to convert frameworks into execution. Sweden, for example, has paired long-term contracts with reverse auctions and funding visibility, enabling projects to move toward construction. In contrast, large-scale programs like the U.S. DAC Hubs illustrate how even temporary policy uncertainty—such as administrative reviews—can disrupt investor confidence, particularly for capital-intensive, first-of-a-kind projects.

CDR Grant Capital Announced/Committed Across Programs and Schemes

Source: Carbon Removals and Offsets Monitor

A notable feature of current capital flows is concentration. A significant share of committed funding is directed toward a limited set of pathways and projects, particularly large-scale engineered removals. This reflects the need for public de-risking, but also introduces fragility—delays or policy shifts in a few programs can disproportionately impact overall market momentum.

Another layer of support is emerging through broader climate funding mechanisms, such as EU Innovation Fund, Horizon EU and CCUS programs. While not CDR-specific, these are playing an important role in early-stage project financing, helping bridge the gap between innovation and commercial deployment.

It is also important to distinguish between announced and deployed capital. Much of the current funding reflects commitments rather than fully disbursed investment, pointing to a market where capital is mobilizing, but not yet consistently reaching execution.

The Infrastructure Constraint: The Missing Layer

A less discussed but critical theme was the role of enabling infrastructure. Fiscal incentives and demand signals alone are insufficient if projects cannot physically operate at scale.

The presentation identified infrastructure as a key layer of the policy stack, particularly for transport and storage of CO₂. The panel expanded on this by highlighting real-world challenges around permitting, regulatory approvals, and public acceptance.

In some cases, projects with strong financial backing and policy support are delayed due to the absence of permitting frameworks or infrastructure readiness. Questions around storage safety, regulatory jurisdiction, and community acceptance are becoming increasingly important, particularly in regions where such systems are not yet established.

This shifts the focus from policy design to implementation capability. Scaling CDR requires not only financial and regulatory frameworks, but also the physical systems that enable projects to operate.

Demand Creation: Moving Beyond Voluntary Markets

The need to move from voluntary demand toward structured demand mechanisms was a central theme of the presentation.  Government procurement is emerging as one of the earliest tools for demand creation. Programs such as Canada’s initial procurement initiative are small in scale but significant in function. They establish early price signals, create institutional buyers, and begin to build the infrastructure required for sustained demand.

The panel discussion provided practical insight into how this transition is beginning to take shape. The discussion highlighted that procurement is less about immediate volume and more about laying the groundwork for future market development. It introduces consistency into demand, supports project financing, and signals long-term policy commitment. This marks a shift from reliance on voluntary corporate action toward more structured and policy-driven approaches to demand formation.

Compliance Integration: The Critical Gap

Both the presentation and panel converged on the importance of compliance markets in scaling CDR.

While certification frameworks such as Europe’s CRCF are advancing, the panel highlighted a fundamental gap—these frameworks are not yet backed by enforceable demand mechanisms. This creates a situation where supply can be defined and certified but not necessarily absorbed at scale.

At the same time, integrating CDR into compliance systems presents its own challenges. Policymakers are cautious about maintaining the integrity and price stability of existing carbon markets, particularly in systems like the EU ETS. This has led to a more gradual and selective approach, with early focus on highly measurable and durable pathways.

The result is a transitional phase where CDR sits between voluntary and compliance systems, without being fully anchored in either. Progress toward integration is visible, but timelines remain uncertain and dependent on broader policy developments.

Market Design Signals: Price Limits and the Role of Voluntary Markets

The panel also surfaced important signals on how different market layers are likely to interact as CDR evolves. One key point was the limitation of relying on compliance market pricing alone to drive scale. Even in relatively mature systems such as the EU ETS, current price levels—and the political constraints around allowing them to rise further—are unlikely to bridge the cost gap for durable CDR. This suggests that additional mechanisms beyond carbon pricing will be required to support integration at scale.

The discussion also pointed to a transitional role for voluntary markets, particularly as they evolve toward stronger credibility and clearer claims frameworks. While voluntary demand alone is insufficient for large-scale deployment, improvements in standards and buyer frameworks could help rebuild confidence and act as a stepping stone toward broader policy integration.

Together, these signals highlight that the path to scale is unlikely to rely on any single market channel. Instead, it will depend on how pricing, voluntary demand, and policy mechanisms interact to create a more complete demand ecosystem.

Looking Ahead: From Policy Design to Policy Delivery

The webinar highlighted a market that is no longer constrained by lack of ambition or capital, but by the ability to translate policy frameworks into functioning systems.

The building blocks are in place: demand signals exist, capital is available, and policy architectures are being defined. The challenge now lies in alignment and execution. Progress will depend on how effectively different elements of the policy stack are integrated, how quickly compliance markets incorporate removals, and whether infrastructure and permitting frameworks can keep pace with investment.

The next phase of the CDR market will be shaped less by new announcements and more by execution-how effectively existing frameworks are implemented, aligned, and scaled. What is emerging is a transition from early momentum to a market defined by policy effectiveness, system integration, and delivery.

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